General Motors Co., the automaker 61 percent owned by the U.S., is giving 12 top executives share equivalents worth an estimated total of $24.5 million that could be exercised once the company goes public.
GM issued 184,255 salary stock units and 71,155 restricted stock units executives can exercise if they hit certain performance targets, the Detroit-based automaker said yesterday in regulatory filings. Each unit represents one share of stock, and if GM stock hasn't been trading for six months, the executives will receive cash.
Chief Executive Officer Ed Whitacre, who also serves as chairman, wants GM shares to trade by the fourth quarter, and company and Treasury officials have been meeting with investment bankers in recent weeks to select one to manage the initial public offering, people familiar with the matters have said.
"This is probably 100 percent related to their run up to an IPO," Joe Phillippi, president of AutoTrends Consulting in Short Hills, New Jersey, said yesterday. "It's probably one more step in preparation to go public."
A stock sale may not be held until next year, Chief Financial Officer Chris Liddell said last month.
The company's equity should be worth $70 billion, according to a May 20 report by Eric Selle, a JPMorgan Chase & Co. debt analyst who projects a return of 47 cents on the dollar for holders of bonds issued by GM's predecessor, General Motors Corp., that will be converted to stock and warrants in new GM.
At yesterday's bond prices, GM's implied equity value is about $48 billion. Assuming 500 million shares, that would equate to about $96 a share.
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